Becoming
a sole proprietor step-by-step.
When starting a business from home, you'll find that
becoming the sole proprietor is the easiest choice
to make.
This means that you are 100% responsible for every
part of the business, including the administrative
decisions and the debts that you may owe. It has many
benefits apart from the sheer control it gives you
over the business.
Becoming a sole proprietor has downsides as well.
Downsides to Becoming a Sole Proprietor
If you decide to become the sole proprietor of a home
based business, you will put your own livelihood at
risk. The money you borrow to start up the business
will come from your personal credit, and therefore
you will be responsible for paying it back. If the
business should fail, this would mean liquidating all
of your assets to pay back the lenders that helped
you get on your feet. Therefore it may be harder to
start larger or riskier businesses with a sole proprietorship.
You can only have smaller business plans, but this
may have been what you were planning anyway.
Alternative to Becoming a Sole Proprietor
You may also consider another business form such as
a partnership. If you have a friend or colleague who
would like to go into business with you, this could
be a better choice. With sole proprietorship, you have
complete control over the company. But for many people,
this isn’t a positive. With a partnership, you
are able to discuss business decisions and get the
opinion of another person. If you can provide each
other with feedback, your business will take off much
faster and will have a higher chance of success.
Eventually, your choice will depend on how confident
you are that you can control the business effectively
on your own. The thought of having complete control
over a business overwhelms many people, while many
jump at the chance. So if your personality allows for
it, a sole proprietorship will be a good choice because
of the tax savings and the money you will save.
They
didn't think I could start my own business ...
but I did! Here's how I did it! |